The basic rule
Its (no apostrophe) is a possessive pronoun, just like "his," "her," or "their": "The dog wagged its tail." It's (with apostrophe) is a contraction of "it is" or "it has": "It's raining today." "It's been a long week."
The one-second test
Expand the word to "it is" or "it has." If the sentence still makes sense, use it's. If it sounds wrong, use its. Test: "The dog wagged it is tail" — doesn't make sense, so it's "its." "It is raining today" — makes sense, so it's "it's."
Why this is confusing
Normally, apostrophes show possession in English ("the dog's tail"). But "its" is an exception — like other possessive pronouns (his, hers, ours, yours, theirs), it never takes an apostrophe.
Examples
Possessive (its): "The company changed its logo." "Every rule has its exception."
Contraction (it's): "It's time to go." "It's been great meeting you."
Frequently asked questions
How do I quickly check if I should use "its" or "it's"?
Mentally replace it with "it is" or "it has." If the sentence still works, use "it's"; otherwise use "its."
Why doesn't "its" have an apostrophe if it shows possession?
Because possessive pronouns in English (his, hers, its, ours, theirs) never use apostrophes — only nouns do ("the cat's toy").
Is "it's" ever a possessive?
No, never — "it's" is always a contraction, never possessive.
Which is correct: "the company lost its way" or "it's way"?
"Its way" — this is possession (the company's own way), not a contraction.